Market researchers have discovered that hardware revisions have resulted in a …

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The PlayStation 3 has long suffered from high production costs, which has forced Sony to sell the console at a loss since its release. Revisions during a console lifespan slowly bring the cost of the system down to more profitable levels, however, and industry market researchers at iSuppli claim that the current generation of the system has seen a 35 percent decrease in overall production cost since last year.

iSuppli, a well-known source of component pricing for various devices, broke the system down and estimated the cost of the original 2006 generation PlayStation 3 units at $840.35 and then $690.23 in 2007; prices for the individual components were based on market prices at the time of manufacture. The company has again broken down a system manufactured this year, with prices circa October 2008, and found that the console has come down in cost to $448.73. Cost cuts were attributed to a more advanced version of the Cell processor, with a 65-nanometer process and a less expensive power supply, as well as reductions such as the loss of the Emotion Engine chip.

iSuppli's numbers have proven to be fair estimates before, so this is probably a good ballpark figure for what Sony is spending these days on making PS3s. Sony has been working diligently to reduce the cost of the PS3 in the search for profit, and further revisions in 2009 will likely see the cost fall even more. Some are even speculating that a price drop could be coming in time for the company's big title Killzone 2 in February, although Sony has yet to comment on the rumors.